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Screen Australia horror cuts in squalid backroom shakedown

David Tiley

Government cuts Screen Australia for third time in three years, to fund Hollywood to bring those footloose productions to Australia.
Screen Australia horror cuts in squalid backroom shakedown

Did you think they'd gone away? Carnivorous dinosaur from Discovery Kids

Federal Treasurer Scott Morrison has brought down his mid-year economic and fiscal outlook (MYEFO) which was always expected to be a gut-cutting horror mini-budget. 

Screen Australia has just lost a further $10.3m over four years, which is effectively another 3% cut. 

There is a twist to this which is even uglier. The government has built a series of fiscal walls between departments by requiring that all new initiatives are paid for out of the same portfolio. This includes the $47.3m used to entice overseas productions just after Turnbull became Prime Minister. Now the budget statement finally reveals where that money will come from.

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Screen Australia has just sold the Linfield site, which the sector hoped would give the agency a fighting fund for further innovation strategies. Instead, the $35m it received was returned to the Department of Communications and the Arts. 

As one small line in page 151 of the whole budget document, the government announced that this money would be used for the $47.3m which it has already committed to the overseas productions of Thor and Prometheus. The $10.3m cut from Screen Australia will be used to plug most of that gap with a neat $3m coming from cuts to the wider arts community.

So, revenue historically designed for the Australian industry, to support Australian stories and voices, has been directly exported to foreign studio productions. 

Here is another twist. That $47.3m is basically revenue neutral. That is, the government gets it back from payroll and other taxation measures from large productions spending foreign investments in Australia. Is that return flowing back to Screen Australia and the arts sector?

Not on your poor bewildered nellie.

What is more, if this money had been provided via a 30% location offset, for which the industry has campaigned since 2008, it would not be a direct cost to the department but to Treasury, like any other tax benefit. It is unlikely that the department would have paid for it, or Screen Australia would be flensed to pay the 40% domestic offset already. We can argue that is happening, but not to the full amount. 

When Screen Australia put out its forensic but tactful release, it included none of this, probably because the page 151 money grab had not sunk in. But blood is pouring from its orifices.

While it has flexibility in the implementation of these cuts, the agency has still to absorb a further $2.2m in 2016-17 and $2.35m the year after that.  Those cuts have just expanded to $4.6m and $4.75m. 

The agency claims it wont have to cut further this financial year, while cash reserves secured from loans made to the Film Finance Corporation will put $4.3m back into the system, so the total cut will be $5.7m. However, this money has surely been notionally committed to defend program expenditure already. 

Revenue will fall from the $100,843m this year to $82.132m in 2017-18. That is a reduction of almost $18m compared to this year. In 2013-14 it had $100.843m, in 2014-15 it is $90.308m; 2015-16 it will be $84.401m, in 2016-17 $84.408. 2017-18 $82.132m and in 2018-19, it will be down to that $82.132m.

 Notice that the games initiative was finished this year, which took $10m out of the budget. The multiplatform initiative goes in 2017-18, which puts a further burden on the diminished budget of up to $2.5m.  

It will be a bitter pill for local producers if the government raises the location offset given to overseas producers while cutting crucial revenue to Screen Australia at the same time. 

It would help if the TV offset goes up, but it is pretty useless if all it does is compensate for cuts. 

We understand that SBS and the ABC have been spared. Meanwhile, the entire arts sector has been belted for a total of $52.5m. 

   

About the author

David Tiley is the editor of Screen Hub.

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